Valitor victory “only the first step”
in battle with payments industry
Whistleblowing website WikiLeaks brought home
a landmark victory against major players in the e-payments industry
last week, after an Icelandic court ruled that e-commerce gateway
Valitor (formerly Visa Iceland) should resume processing credit
card donations after a one-year hiatus.
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The donation block began last year, when
WikiLeaks published sensitive government and corporate documents,
including US diplomatic information, and fuelled rumours the
payments industry was acting under government pressure.
The self-styled ‘transparency publishing
group’ said the “embargo” led to a 95% loss in revenue, restricting
its ability to provide information and pay its legal expenses.
WikiLeaks spokesman Christinn Hrafnsson told
Cards International the website’s founder Juliane Assange expected
the victory, as the blockage was “clearly illegal” and this ruling
is only the first step of a broader battle for freedom.
“It is totally clear that these major players
in the payments industry – not only Visa, but other major US
financial firms, including MasterCard and PayPal, Western Union and
Bank of America – were acting illegally. This is only the first
step of our battle but it is very pleasant to get this outcome,” he
said.
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By GlobalDataHrafnsson made it clear that this it is “not
only a WikiLeaks issue, but a much bigger one, related to human
rights”.
The decision to deny WikiLeaks access to
e-payments capability was equal to “taking away from people the
possibility to exercise their rights: it is intolerable,” he
said.
“You cannot let these companies decide how
individual spend their own money. These are companies who aim to
eradicate paper money and they therefore have to act
responsibly.”
WikiLeaks is now awaiting a decision from the
European Commission after filing a joint-complaint with IT company
DataCell, stating that Visa Europe and MasterCard violated EU
antitrust laws by blocking donations.
“The entire world is part of this e-culture,
we are moving to the electronic world and there has to be a
behaviour-frame that safeguards the general public,”
concluded Hrafnsson.
Payment processing a human
right?
But Tim Buckingham, partner at DLA Piper and
card acquiring specialist, disagrees. “I think there is a danger of
blurring the edges between emotive issues and what has to be the
fundamental ability of any merchant acquirer to elect which
businesses it chooses to process transactions for,” he said.
While for WikiLeaks sees the payments industry
as having a democratic duty, Buckingham stresses that “banks have
to be able to decide who they want to do business with”.
“These companies are not ‘eradicating paper
money’ at all. The internet has simply required the development of
different types of payment mechanisms,” he said.
“Charities have been raising money without
needing an acquiring facility for some time. While it may not be as
convenient, it is hard to see how this prevents people making
donations if they want to – they could easily write a cheque or
send cash.”
Consult Hyperion chief executive Dave Birch
said it is difficult to say whether e-payments constitutes a human
right or not.
“What I will say is that it is probably wrong
to use the payments system as a policeman,” he said. In his
Digital Money blog he said there is a real problem in
doing so, “especially when the decision about what is or isn’t
allowed is not black and white, or varies from country to country
or even between constituencies within a country”.
“It is clear that there are some people who
want to constrain peoples’ spending, and sometimes for a very good
reason, but is it right to expect the payment system itself to do
this?” he said.
A “positive example” would be, according to
Birch, that of stopping minors from buying cigarettes. In this
case, the payment system is being used as an imperfect proxy for an
identity management system. “This means that the costs of
detection, filtering and prevention are all falling on the payment
system (in other words, on law-abiding customers) which does not
seem right,” he said.
